THE DEVELOPMENT PROBLEM UNDER EMBODIMENT

Raouf Boucekkine (), Blanca Martinez () and Çağrı Sağlam

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: We study technology adoption in an optimal growth model with embodied technical change. The economy consists of the final good sector, the capital sector, and the technology sector which role is the imitation of exogenous innovations. Labor resources are scarce. They are freely allocated to the technology and final good sectors. The final good is freely allocated to consumption and to the capital sector. We analytically characterize the optimal allocation decisions in the long run. Using a calibrated version of the model, we find that an acceleration in the rate of embodied technical change should not be responded by an immediate and strong adoption effort. Instead, adoption labor should decrease in the short run, and the optimal technological gap is shown to increase either in the short or in the long run. The state of the institutions and policies around the technology sector is key in the design of the optimal adoption timing.

Keywords: Embodiment; Technology adoption; Technological gap; Transition dynamics (search for similar items in EconPapers)
JEL-codes: E22 E32 O40 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2003-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2003-08.pdf Fisrt version / Primera version, 2003 (application/pdf)

Related works:
Journal Article: The Development Problem under Embodiment (2006)
Working Paper: The Development problem under embodiment (2006)
Working Paper: The Development problem under embodiment (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2003-08

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